CG17400 - Indexation: from 6/4/88: no gain/loss cases: treatment of transferor

TCGA92/S56 (2)

Where there is a disposal of an asset for Capital Gains Tax purposes and that disposal is to be treated under any provision of the Capital Gains Tax legislation as one on which neither a gain nor a loss accrues, the indexation allowance is calculated in the normal way on the items of RAE incurred by the person making the disposal. Under TCGA92/S56 (2) the consideration for the disposal is calculated on the basis that there is an unindexed gain, see CG17232, equal to the indexation allowance.

The main examples of this are

  • transfers within a group (TCGA92/S171) and
  • transfers between spouses or between civil partners (TCGA92/S58).

More detailed instructions on transfers within groups are at CG46101+.

There is an example at CG22240 (spouses & civil partners). In exceptional circumstances, for example where enhancement expenditure has been incurred by the transferring spouse or civil partner, it can make a difference to compute on the strictly correct basis rather than adopting the conventional method which treats the two or more taxpayers as if they were one.